Its chief financial officer warns of macroeconomic storm clouds ahead in 2012.
market leader VMware turned in another stellar quarterly earnings report Oct.
17, citing profit of $178 million in the third quarter that more than doubled
what it banked a year ago.
However, its chief financial
officer also warned of macroeconomic storm clouds ahead in 2012.
The Palo Alto-based company
earned 42 cents per share in Q3, and recorded revenue of $942 million, an
increase of 32 percent over the same period in 2010. On average, Wall Street
analysts had expected earnings of 50 cents a share on revenue of $929.37
results were driven by growth across all products. Demand was especially strong
in the Asia-Pacific markets, and we also experienced the seasonal impact of
sales to the U.S. federal government," CFO Mark Peek said on the
Fourth-quarter revenues are
expected to be in the range of $1.03 billion and $1.06 billion, a
year-over-year increase of 23 percent to 27 percent, Peek said.
However, 2012 looks like a
different story. The next year still will be profitable for VMware, Peek said,
but not quite as profitable as 2011.
"There is an
expectation of lower growth rates for both IT spending and server shipments
relative to 2011," Peek said. "For the first quarter of 2012, we are
currently planning for revenues to decline sequentially from Q4 in the range of
$1 billion to $1.03, an increase of approximately 18 percent to 22 percent,
compared with the first quarter of 2011.
Peek reminded listeners on
the call that in Q1 2011, VMware closed five sales in excess of $10 million
apiece, and "we do not anticipate this benefit in the first quarter of
CEO Paul Maritz said that
the company would release news Oct. 18 on the opening day of VMworld Europe in
Copenhagen about new partnerships for its CloudFoundry
VMware describes Cloud Foundry
as the world's first open platform
as a service (PaaS) offering. The initiative provides a platform for building,
deploying and running cloud applications using Spring for Java developers,
Rails and Sinatra for Ruby developers, Node.js and other Java Virtual Machine (JVM)
languages/frameworks including Groovy, Grails and Scala.